Directors of company were deadlocked; were two factions of directors, both of whom refused to turn up to board meetings called by the other side in order to prevent there being a quorum. General meeting of shareholders purported to appoint an extra director to break deadlock; one group of directors challenged this decision on grounds that only directors had power to appoint directors. Held:
· Is a default common law rule that annual general meeting has power to appoint directors where board is incapable of acting due to deadlock.
· Thus appointment valid.